A group of major philanthropic foundations has urged foundations to focus on measurement, social enterprise and targets in order to make a greater impact.

Representatives of four foundations which have been working with the OECD on increasing foundations' impact and sustainability have called on them to concentrate on working with fewer recipients, to adopt social enterprise as a means of making sustainable social change, and to stop operating on time-bound projects.

Chris West, the director of the Shell Foundation, said that after three years of operating, the foundation had discovered that 80% of its grant-giving had failed to have any sustained or scalable impact. West said that this was partly due to the execution capacity of recipients, but also the way in which the foundations worked – funding lots of small projects restricted the amount of added value it could give to partners. This discovery had spurred the foundation to change the way it operated, he added, with 80% of money being invested now having the desired impact.

West also warned that foundations had to be more transparent about their own performance: "Foundation reports can be like glossy marketing magazines … just because you're doing good doesn't mean you're doing it well."

Clare Woodcraft, the director of the Emirates Foundation, echoed the message around simplicity, saying that when her organisation was giving out lots of small grants, it was very hard to measure impact. The Emirates Foundation now has six simple key performance indicators and has also changed its focus from being a grant-giver to hundreds of groups across multiple areas, to focus on one core issue – youth in the United Arab Emirates – with all programmes implemented in-house. Woodcraft said that they were also no longer looking at time-bound projects, and instead intend to continue working on issues until they have delivered systemic change.

Hassan al-Damluji, the Middle East director of the Bill and Melinda Gates Foundation compared foundation targets to the millennium development goals: "We have failed to meet the targets on the MDGs, but a huge amount of progress has been made. Would that much progress have been made without them?"

He urged foundations to invest in measurement: "Things cost money to measure. Not having the data will harm the programme more than the extra spend." Al-Damluji also welcomed the prospect of the development of an impact measurement metric which measures interventions and spending in different areas, noting that the Disability Adjusted Life Year offered a way of comparing the impact of different healthcare interventions.

Bathylle Missika, the deputy head of the OECD's policy dialogue division, said that the group's research had found some commonalities between foundations who were changing their models. She said that foundations that embraced change were driven by individuals who put a drive for value in motion in their organisations. She added that foundations which wanted to change had to invest in research to help drive the definition of key performance indicators, and to identify where the foundation could have maximum impact.

She also urged foundations to look at their NGO partners as spouses: "Give them means to succeed, don't ring them every day to find out if they are cheating on you. Give them space."

Emirates Foundation paid for the flights to and from Abu Dhabi and accommodation for the journalist who wrote this article

• The article was amended on 13 November 2013 to remove a quote.

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